Think Ahead To Excel

In a December 2013 interview on “60 Minutes,” Amazon.com CEO Jeff Bezos declared, “Complaining is not a strategy.” In the electrical contracting industry, each day is a battle for the cash flow to make it to the next project, so what can electrical contractors learn from a guy whose optimism is legendary? It’s easy for Bezos to maintain equanimity when everything he touches becomes the next great expansion of the online bookstore that exploded into a worldwide e-tailer providing practically every product anyone could want—including fresh produce to rival what’s available in the local grocery store.

Perhaps Bezos had read and implemented Jon Gordon’s book, “The No Complaining Rule,” with its pithy strategies for improving morale and creating a more positive business environment. What’s more important is how Bezos has led Amazon to its position as a darling of the stock market despite his contrarian views of what it takes to build a successful company. A few of his strategies are worth considering.

Think long-term

Most publicly traded companies cater to stockholders who expect immediate returns on investment in the form of dividends and consistent growth in the value of their shares. In a culture that has replaced the leisurely family dinner with the 90-second, drive-through meal-in-a-bag, stockholders with the same level of patience trigger executive decisions that have disastrous long-term effects on intrinsic value. Amazon’s strategy requires tolerating lower levels of short-term profit to realize financial goals over five to seven years, instead of the usual two- or three-year cycle.

Expedite fulfillment

With nearly 100 warehouses, Amazon has brilliantly managed the logistics of order fulfillment, minimizing delivery times through the aggressive use of cutting-­edge inventory sorting and retrieval technology. Products are located to maximize the use of available storage space and coded to allow for effective picking and shipping by an automated system that minimizes error, yet relies on human monitoring.

To push the envelope further, Bezos seeks creative solutions to better expedite delivery to customers, including the construction of more facilities. But he doesn’t stop there. During the “60 Minutes” interview, he unveiled a room containing drones the size of large toy helicopters that will be able to deliver 85 percent of Amazon’s products in the time it takes Domino’s to deliver a pizza. After some tweaking to ensure that the delivery drones don’t land on customers’ heads or interfere with FAA regulations, your order will arrive within 30 minutes of placement.

Strategic pricing

ECs are familiar with at-cost pricing in the competitive construction world. But deliberately introducing an at-cost pricing strategy to build market share has not proven successful for contractors that panic when backlogs evaporate and throw profit aside to obtain any project that will keep the doors open.

Amazon, on the other hand, has managed to calculate the strategic value of using at-cost pricing to entice customers to try new products, add to their orders, and return to the company as their default provider. The strategy builds long-term loyalty.

So what?

You might be wondering why Amazon’s strategies apply to your electrical contracting business. That kind of narrow thinking has relegated many contracting companies to a hand-to-mouth existence and early demise.

ECs who intend to survive for another generation, or even another decade, must stop complaining about what is wrong with industry practices and relationships. Then they will be free to think like Bezos as they design future strategies for growth, profit and expansion into new markets and specialty niches.

That might mean waiting longer to withdraw assets from the business so they can be used to generate growth. It might alter retirement timelines or transition plans. It will definitely lead to creating systems that incorporate the latest technology for scheduling, delivery of materials, organization of labor, and communication, and for emulating the best practices of retailers and wholesalers. It also means a better understanding of actual costs and knowing how to strategically adjust profit expectations when necessary to gain loyal customers who are great to work with and amenable to allowing their contractors a reasonable profit.

Look back and learn from the mistakes you made when you failed to think long-term because you panicked, and evaluate the opportunities you passed on because they didn’t fit your traditional view of what your company could do better than its competitors. And cultivate a right-brain (creative) perspective in the left-brain (analytical) construction industry. The moving train that contains customer desires, best business practices, and technology-driven logistical management systems has become a rocket ship that is about to take off. Make sure you’re on board.